IT services revenue up 6% in 2005, says Gartner


IT services revenue up 6% in 2005, says Gartner

Tash Shifrin

The worldwide IT services industry generated $624.4bn (£338bn) last year, with project-based services and software support growing faster than outsourcing for the first time in five years.

Figures from analyst firm Gartner show 2005 revenues across the IT services sector increased by 6% on 2004’s total of $588.9bn (£319bn) revenues.

Healthcare was the biggest growth area for spending on external IT services in 2005, although the segment is relatively small, with spending up 8.7% to $19.4bn (£10.5bn) in 2005. The financial services market is still the biggest for IT services revenue, generating $141.3bn (£76bn) last year, 7% up on 2004.

Kathryn Hale, research vice-president for Gartner's worldwide IT services group, said the outsourcing segment of the IT services market had traditionally been the key growth area, but the trend changed last year.

“In 2005, project-based services and software support grew at a greater rate than the overall market average, which has not been the case since 2000,” she said.

Project-based services also saw an upturn in the Europe, Middle East and Africa region, where IT services revenue totalled €173bn (£118bn) last year – up 5.8% on 2004.

Robert De Souza, principal research analyst at Gartner in EMEA, said: “Project-based services - that is consulting, development and integration - returned to a healthier growth in 2005 with a 5.6% increase from 2004.

“In addition, process management grew almost 2% higher than the average market growth, with an increase of 7.9% compared to last year.”

IBM continued to be the worldwide IT services market leader, with a 7.6% share – well ahead of EDS (3.2%) and Fujitsu (2.8%).

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